Filipinos are known to love eating, and one of the staple foods we usually eat three times a day is rice. Our country has various cities and provinces that grow rice crops. We even import and export our quality harvests all over the world. It wouldn’t be a surprise if you would be interested in starting a buy and sell rice business. They are also evident in the local market and small businesses. Knowing the vast market, it caters to, it is one of the most popular products to sell.
However, just like any other food business, a buy and sell rice business has its pros and cons. It is something you have to weigh in and think about thoroughly before venturing in. You have to consider many factors such as your capital, knowledge of the system, processes, and many more. Once you start, there is no turning back. There is a high chance of ROI, but you have to know the basics to get there. Here is a complete guide if you want to start a rice business.
Starting a Buy and Sell Rice Business in the Philippines
1. National Food Authority (NFA) license
If you’re looking to be a distributor of rice, it is mandatory to have it registered and approved by the National Food Authority, whether it’s commercial or NFA rice. Your first or foremost store should already have a license before you can branch out and have different outlets. You have to go to the corresponding NFA office of your business’s location and submit the requirements. You should get an application form from the licensing officer. There will also be licensing fee, but it depends on the amount of capital you have.
2. Department of Trade and Industry (DTI) Permit
Once you have secured your NFA license, you need to register your business to the Department of Trade and Industry if you are a sole proprietor. Still, if you have multiple partners or under a corporation, you have to register to the Securities and Exchange Commission (SEC).
3. Required Equipment and Facility
During the NFA licensing processing, they will visit your business establishment and check if you have the right equipment and facility to start a rice business. You need to ensure you have the following:
- Calibrated weighing scale
- Price tags indicate the price per kilogram
- Rice boxes painted in white
- The signboard includes your business name, NFA control number, and the words “Licensed Grains Retailer” or “Wholesaler.”
- Display the variety, classification, and grade of rice you will sell
If the NFA inspector approved the inspection, he would issue you a Notice of Inspection, which you will have to bring to the NFA office along with the official receipt for you to get your license.
4. Business Location
One of the things to consider before pursuing this business is your location. Is it strategically located to your target market? Is it visible? Is foot traffic consistent? Those are just a few of the things you need to think of, as this will be a crucial part of your business. If the location is not well received by your market, there is no point in staying there. A few great options for these are markets, villages or subdivisions, and groceries.
5. Storing Rice Properly
Rice is perishable, so it is a must to store it properly over a long period. Our climate is usually hot and humid, making the rice spoil fast or deteriorate your rice quality. Bugs and insects are also drawn to it, so you have to make sure that your storage is not too hot, organized, and clean at all times. To ensure the rice maintains its quality after being sold, sell the first batches in the inventory to the last.
6. Monitoring and Consistency
You also have to consider having workers or staff help you monitor the inventory, storage, and dispatching of rice and maintain the cleanliness of the facility. You can form a dedicated team and train them to handle these things with the utmost skill and consistency.
7. Ties with Customers and Suppliers
A business is nothing with its customers as well as its suppliers. Customers help businesses thrive and succeed while suppliers provide the goods we cater to the customers. There is no either-or; you have to establish a good relationship with both of them to grow your business. Having a smooth relationship with your suppliers opens new opportunities to increase sales and makes you their priority, which is advantageous for you while having loyal customers can secure your business in the long run.
8. Budget Tracking
Tracking your budget can help you avoid future problems with your suppliers. Many suppliers offer discounts and deals with a minimum purchase which can help increase your profit. It is also beneficial in preventing running out of stocks and keep up with the demand.
9. Market Behavior
Business owners can easily overlook this, but knowing how your market behaves can be a great advantage. You can monitor what specific classification of rice your market prefers when they usually buy in bulk, how pricing affects their buying probability, how often your market buys rice, your frequent and new customers. Knowing these data can help you strategize on buying, marketing, and advertising your business.
10. Rice Transportation
Rice can be delivered and transported all around the Philippines, so you have to ensure that the rice is well covered and not exposed to the sunlight during transportation. The sack carrying it is also essential to check for scratches or possible holes.
Having a Rice Business is a Constant Learning Process
It may seem more manageable as it looks, but pursuing this business requires a lot of patience, responsibility, and hard work. The above provides the skeleton of what you should plan, and it’s up to you to apply everything in reality.